Molson Coors reviews Brazil brew unit

WilliamSpain

CHICAGO (MarketWatch) - Molson Coors Brewing Co. is "unwilling to make further cash investments" in Cervejarias Kaiser, its money-losing Brazilian subsidiary, and hopes to run it on a break-even operating basis while exploring "a full range of options" for its future in the country, the company said Wednesday.

While Molson Coors
TAP, -0.90%
thinks that Brazil is a good beer market with long-term potential, it doesn't want to put any more money into Kaiser "without greater certainty that it is a viable, long-term platform to compete effectively," said CEO Leo Kiely in the announcement. "We want to be in the Brazilian market, but only on a winning basis, and not at the current risk level."

The company said that despite losses and lower volumes in recent months, Kaiser's financial results have improved year-over-year. For the four months ended April 30, the unit had negative cash flow from operations of $3 million, a fraction of the $22 million in the year-ago period.

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